The main reason is to fight inflation. Inflation decreases the value of cash over time. I’m sure many of us have witnessed inflation. For example, I live in Indonesia, when I was a kid in 1995 the price of a comic book was Rp3.000, and how much is the price today in 2021? Rp30.000. It’s 10x more expensive. So, if you save your money in cash in 1995, the value of it will decrease around 10x lower in 2021.
Investing your money in the company’s stock can help you to fight inflation. The stock’s value copes up with changing economic factor. When the price of service and goods are rising, the value of the company’s stock more likely will value more.
I’m not saying that saving is bad. Otherwise, saving is good for the short term, but in the long term, it will be better to allocate the money for investment.
Moreover, investment in a publicly traded company’s stock is easier than investing in a private business. A public company always has public information that we can check and compare between other public companies e. g., the financial report, the board member, their operation, etc.
Now you get the main reason and benefit of the investment. Let’s start the journey together and keep following All Trades Digital’s newsletter.
Disclaimer: The views and opinions expressed here are solely my own, and you should not interpret them as financial advice. Every investment and trading involves risk. When making a decision, you must research it by yourself. I am not a financial advisor.